Advertisements vs. Paid Subscriptions for YouTube: Which do Viewers Prefer?

According to a new YuMe survey, at least 48 percent of connected TV viewers watch YouTube videos several times a week. The survey focused on YouTube and online video viewers who watched content through game consoles, Blu-ray players, smart televisions and set-top boxes.

The report also stated that 30 percent of internet-connected households had some device that connects web to television.

Most interestingly, when these users were given the choice between ad-sponsored videos or a subscription model like Hulu Plus or Netflix, 60 percent of online video viewers preferred the free ad-sponsored model over subscriptions.

Why do YouTube users prefer ads before their favorite videos over paying for content? It may be because nearly half of connected viewers watch short-form videos (under 30 minutes). Since YouTube is a user-generated site, it can be seen by creators as a testing ground for more elaborate projects in the future. If an audience enjoys and interacts with certain video content, they will presumably be more inclined to give up more for that content. When creators put out popular quality content, they will have more leverage in charging for their content (e.g. subscriptions).

Although subscription models have worked for companies like Netflix, it would end up being too costly for YouTube viewers and creators to support a subscription model at this time; viewers would be less inclined to watch videos should creators impose subscription fees, and creators would also have to find ways to market their subscription services.

There have been hints lately that a YouTube subscription model that would separate prominent quality content from the rest of the user-generated content could happen. It would further bring a “level of curation” to YouTube, which they’re already attempting to do through sponsorship of original channels. With the survey results favoring the current ad-sponsored model over subscriptions, the company should hold out on beginning a subscription model until it finds compelling content that would justify payment.

The survey highlights positives for users, creators and advertisers alike. Users and creators still cherish their free YouTube service even if they have to endure advertisements, and advertisers find no better target than young and connected YouTube viewers. Should YouTube switch to a subscription model entirely or place some of its featured stars under a subscription model, this would shut out a potential audience for creators. As of right now, expect a migration of YouTube viewers to other sites if a subscription model happens.

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Ed Carrasco has been in the journalism field for nearly a decade. Some of his photographs/articles have been featured in publications such as the Guardian, LA Weekly, OC Weekly, the Fullertonian, Cerritos-Artesia Patch and Orange Coast Magazine.
He graduated with a bachelor’s degree in English from UCLA and a master’s degree in Journalism from Kingston University in the United Kingdom.

[…] will certainly push the Google-owned video site further into the realm of major media. However, a YuMe survey released in August 2012 showed that 60 percent of online video viewers preferred free ad-sponsored model to […]